Volume 3, Part 1, Slice 1 Part 13 (1/2)
Loss of freight arising from damage to or loss of cargo shall be made good as G.A., either when caused by a G.A. act or when the damage to or loss of cargo is so made good.
RULE XVI.--AMOUNT TO BE MADE GOOD FOR CARGO LOST OR DAMAGED BY SACRIFICE
The amount to be made good as G.A. for damage or loss of goods sacrificed shall be the loss which the owner of the goods has sustained thereby, based on the market values at the date of the arrival of the vessel or at the termination of the adventure.
RULE XVII.--CONTRIBUTORY VALUES
The contribution to a G.A. shall be made upon the actual values of the property at the termination of the adventure, to which shall be added the amount made good as G.A. for property sacrificed; deduction being made from the s.h.i.+powner's freight and pa.s.sage-money at risk, of such port charges and crew's wages as would not have been incurred had the s.h.i.+p and cargo been totally lost at the date of the G.A. act or sacrifice, and have not been allowed as G.A.; deduction being also made from the value of the property of all charges incurred in respect thereof subsequently to the G.A. act, except such charges as are allowed in G.A.
Pa.s.sengers' luggage and personal effects, not s.h.i.+pped under bill of lading, shall not contribute to G.A.
RULE XVIII.--ADJUSTMENT
Except as provided in the foregoing rules, the adjustment shall be drawn up in accordance with the law and practice that would have governed the adjustment had the contract of affreightment not contained a clause to pay G.A. according to these rules.
The above rules differ in some important respects from English common law, and from former English practice. They follow ideas upon the subject of G.A. which have prevailed in practice in foreign countries (though often in apparent opposition to the language of the codes), in preference to the more strict principle of the common law applied by English courts. That principle requires that, in order to have the character of G.A. a sacrifice or expenditure must be made for the common _safety_ of the several interests in the adventure and under the pressure of a common risk. It is not enough that the sacrifice or expenditure is prudent, or even necessary to enable the common adventure to be completed. G.A., on the English view, only arises where the _safety_ of the several interests is at stake. ”The idea of a common commercial adventure, as distinguished from the common safety from the sea,” is not recognized. It is not sufficient ”that an expenditure should have been made to benefit both cargo owner and s.h.i.+powner.”[1]
[Sidenote: Port of refuge expenses.]
Thus expenses incurred after s.h.i.+p and cargo are in safety, say at a port of refuge, are not generally, by English law, to be treated as G.A.; although the putting into port may have been for safety, and therefore a G.A. act.
If the putting into port has been necessitated by a G.A. sacrifice, as by cutting away the s.h.i.+p's masts, the case is different; the port expenses, the expenses of repairing the G.A. damage, and the incidental expenses of unloading, storing and reloading the cargo are, in such a case, treated as consequences of the original sacrifice, and therefore subjects for contribution. But where the reason for putting in is to avoid some danger, such as a storm or hostile cruiser, or to effect repairs necessitated by some _accidental_ damage to the s.h.i.+p, the G.A. sacrifice is considered to be at an end when the port has been reached, if the s.h.i.+p and cargo are then in physical safety. The subsequent expenditure in the port is said not to flow from that sacrifice, but from the necessity of completing the voyage, and is incurred in performance of the s.h.i.+powner's obligation under his contract. The practice of English average adjusters has indeed modified this strict view by treating the expense of _unloading_ as G.A.; but it may well be doubted whether that practice can be legally supported. Moreover, expenditure in the port which is incurred in protecting the cargo as in warehousing it, is by English practice treated as a charge to be borne by the cargo for whose benefit it was incurred.
If we turn now to York-Antwerp Rule X., it will be seen that a much broader view is adopted. Whatever the reason for putting into the port of refuge, provided it was necessary for the common safety, the expenses of going in, and the consequent expenses of getting out (if she sails again with all or part of her original cargo), are allowed as G.A., Rule X. (a). Further, the cost of discharging the cargo to enable damage to the s.h.i.+p to be repaired, whether caused by sacrifice or by accident during the voyage, is to be allowed as G.A., ”if the repairs were necessary for the safe prosecution of the voyage,” Rule X. (b). And that is to be so even where such repairs are done at a port of _call_, as well as where done at a port of _refuge_.
Again, when the cost of discharging is treated as G.A., so also are to be the expenses of storing the cargo on sh.o.r.e, and of reloading and stowing it on board, after the repairs have been done (Rule X. (c)), together with any damage or loss incidental to those operations (Rule XII.).
Further, by Rule XI. the wages of the master, officers and crew, and the cost of their maintenance, during the detention of a s.h.i.+p under the circ.u.mstances, or for the purpose of the repairs mentioned in Rule X., are to be allowed in G.A. It is questionable whether English law allows the wages and maintenance of the crew at a port of refuge in any case. Where the detention is to repair _accidental_ damage it seems clear that they are not allowed. And in practice under common law, the allowance is never made; so that Rule XI. is an important concession to the s.h.i.+powner. Like the changes introduced by Rule X., it is a change towards the practice in foreign countries.
It may be noted that the rules do not afford equal protection to a s.h.i.+pper in the comparatively infrequent case of his being put to expense by the delay at a port of refuge. Thus a s.h.i.+pper of cattle is not ent.i.tled to have the extra wages and provisions of his cattlemen on board, nor the extra fodder consumed by the cattle during the stay at a repairing port, made as good as G.A. under Rules XI. and X. (_Anglo-Argentine &c. Agency_ v.
_Temperley s.h.i.+pping Co._, 1899, 2 Q.B. 403).
[Sidenote: General average sacrifices.]
As to the acts which amount to G.A. sacrifices, as distinguished from expenditures, the York-Antwerp Rules do not much alter English common law.
They do, however, make definite provisions upon some points on which authority was scanty or doubtful. (See Rules I.-IX.) And in Rule I., as to jettison of deck cargo, a change is made from the common law rule, for the jettison is not allowed as G.A. even though the cargo be carried on deck in accordance with an established custom of the particular trade.
Rule III. deals with damage done in extinguis.h.i.+ng fire on board a s.h.i.+p.
Modern decisions have cleared away the old doubts whether such damage to s.h.i.+p or cargo should, at law, be allowed in G.A. But recent cases in the United States have raised the question whether the allowance should be made where the fire occurs in port, and is extinguished, not by the master, but by a public authority acting in the interests of the public. The Supreme Court of the United States decided against the allowance in 1894 in a case of _Ralli_ v. _Troup_ (157 U.S. 386). The s.h.i.+p had there been scuttled to put out a fire on board, by the port authority, acting upon their own judgment, but with the a.s.sent of the master. It was held that the damage suffered by s.h.i.+p and cargo ought not to be made good by G.A. contributions; for the sacrifice had not been made ”by some one specially charged with the control and safety of that adventure,” but was the compulsory act of a public authority. On the other hand, in the English case of _Papayanni_ v.
_Grampian S.S. Co._ (I. Com. Ca. 448), Mathew, J., held that the scuttling of a s.h.i.+p at a port of refuge in Algeria, by orders of the captain of the port, was a G.A. act. It had been done in the interest of s.h.i.+p and cargo, and there was no evidence of any other motive.
Rule V. deals with the question whether, and under what conditions, a voluntary stranding of the s.h.i.+p is a G.A. act, in a manner which will probably be held to express the law in England when the matter comes up for decision.
Rules VI. and VII. deal with the damage sustained by the s.h.i.+p, or her appliances, in efforts to force her off the ground when she has stranded.
Such efforts involve an abnormal use which is likely to cause damage to sails and spars, or to engines and boilers; and they are treated as acts of sacrifice. The case of ”The Bona,” 1895 (P. 125) shows that the rules are in accord with English law upon the point. The court of appeal held that both the damage sustained by the engines while worked to get the s.h.i.+p off, and the coal and stores consumed, were subjects for G.A. contribution at common law.
[v.03 p.0057] Rule VIII. allows as G.A. any damage sustained by cargo when discharged and, say, lightered for the purpose of getting the s.h.i.+p off a strand. And the corresponding damage in the case of cargo discharged at a port of refuge to enable repairs to be done to the s.h.i.+p is allowed by Rule XII. But in the latter case the allowance does not expressly extend to damage sustained while stored on land. Whether the law would require contribution to a loss of goods, say, by thieves or by fire, while landed for repairs, is not clear. Where the landing has been necessitated by a G.A. act, as cutting away masts, it would seem that the loss ought to be made good, as being a result of the special risks to which those goods have thereby been exposed. The risks which they would have run if they had remained on board throughout are taken into account, as will presently appear, in estimating _how much_ of the damage is to be made good.
Where cattle were taken into a port of refuge in Brazil, owing to accidental damage to the s.h.i.+p, with the result that they could not legally be landed at their destination (Deptford), and had to be taken to another port (Antwerp), at which they were of much less value, this loss of value was allowed in G.A. (_Anglo-Argentine &c. Agency_ v. _Temperley s.h.i.+pping Co._, 1899, 2 Q.B. 403).
The case of a stranded s.h.i.+p and cargo often gives rise to difficulty as to whether the cost of operations to lighten the s.h.i.+p, and afterwards to get her floated, should be treated as G.A. expenditure, or as expenses separately incurred in saving the separate interests. The true conclusion seems to be that either the whole operation should be treated as one for the common safety, and the whole expense be contributed to by all the interests saved, or else the several parts of the operation should be kept distinct, debiting the cost of each to the interests thereby saved. Which of these two views should be adopted in any case seems to depend upon the motives with which the earlier operations (usually the discharge of the cargo) were presumably undertaken. It may, however, happen that this test cannot be applied once for all. Take the case of a stranded s.h.i.+p carrying a bulky cargo of hemp and grain, but carrying also some bullion. Suppose this last to be rescued and taken to a place of safety at small expense in comparison with its value. It may well be that that operation must be regarded as done in the interest simply of the bullion itself, but that the subsequent operations of lightening the s.h.i.+p and floating her can only be properly regarded as undertaken in the common interest of s.h.i.+p, hemp, grain and freight. In such a case there will be a G.A. contribution towards those later operations by those interests. But the bullion will not contribute; it will merely bear the expense of its own rescue (_Royal Mail S. P. Co._ v. _English Bank of Rio de Janeiro_, 1887, 19 Q.B.D. 362).
The York-Antwerp Rules have not only had the valuable result of introducing uniformity where there had been great variety, and corresponding certainty as to the principles which will be acted upon in adjusting any G.A. loss, but also they have introduced greater clearness and definiteness on points where there had been a want of definition. Thus Rule XIII. has laid down a careful and definite scale to regulate the deductions from the cost of repairs, in respect of ”new for old,” in place of the former somewhat uncertain customary rules which varied according to the place of adjustment; while at the same time the opportunity has been taken of adapting the scale of deductions to modern conditions of s.h.i.+pbuilding. And Rule XVII. lays down a rule as to contributory values in place of the widely varying rules of different countries as to the amounts upon which s.h.i.+p and freight shall contribute (cf. Gow, _Marine Insurance_, 305).
It may be of interest to refer briefly to one or two main principles which govern the _adjustment_ (_q.v._) of general average, _i.e._ the calculation of the amounts to be made good and paid by the several interests, which is a complicated matter. The fundamental idea is that the several interests at risk shall contribute in proportion to the benefits they have severally received by the completion of the adventure. Contributions are not made in proportion to the amounts at stake when the sacrifice was made, but in proportion to the results when the adventure has come to an end. An interest which has become lost after the sacrifice, during the subsequent course of the voyage, will pay nothing; an interest which has become depreciated will pay in proportion to the diminished value. The liability to contribute is inchoate only when the sacrifice has been made. It becomes complete when the adventure has come to an end, either by arrival at the destination, or by having been broken up at some intermediate point, while the interest in question still survives. To this there is one exception, in the case of G.A. _expenditure_. Where such expenditure has been incurred by the owner of one interest, generally by the s.h.i.+powner, the repayment to him by the other interests ought not to be wholly dependent upon the subsequent safety of those interests at the ultimate destination. If those other interests or some of them arrive, or are realized, as by being landed at an intermediate port, the rule (as in the case of G.A. sacrifices) is that the contributions are to be in proportion to the arrived or realized values.